Coinbase Launches Fixed-Rate USDC Borrowing Backed by Bitcoin
(9 days ago) · 1 source · Summarized by CryptoBipto — how we make this
Coinbase has introduced a new feature allowing users to borrow USDC stablecoins using their bitcoin holdings as collateral, with a fixed interest rate. The service lets users access liquidity without selling their bitcoin. Details about the specific fixed rate and loan terms have not been fully confirmed from this source.
WHY IT MATTERS
If you are new to crypto, think of this like a pawn shop for bitcoin. Instead of selling your bitcoin to get cash, you can temporarily hand it over to Coinbase as a guarantee (called "collateral") and receive USDC — a digital token designed to always be worth one US dollar — in return. You then pay interest on what you borrowed, and when you pay it back, you get your bitcoin returned. A "fixed rate" means the interest cost stays the same for the life of the loan, similar to a fixed-rate mortgage. This type of service matters because it gives crypto holders a way to access spending money without giving up ownership of their assets, though it comes with risks — if bitcoin's price falls far enough, the platform may sell the collateral to cover the loan.
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